The Falkland Islands will hold a referendum on their political status in 2013, the local government announced today, in a bid to end the bitter territorial dispute between Britain and Argentina.

Gavin Short, chairman of the Falklands' legislative assembly, said the residents of the British overseas territory had no wish to be ruled by Buenos Aires, which claims the Falklands are occupied Argentine territory.

"We have decided, with the full support of the British government, to hold a referendum on the Falkland Islands to eliminate any possible doubt about our wishes," said Short, adding the vote would be held in the first half of 2013.

"I have no doubt that the people of the Falklands wish for the Islands to remain a self-governing Overseas Territory of the United Kingdom," he said.

"We certainly have no desire to be ruled by the Government in Buenos Aires, a fact that is immediately obvious to anyone who has visited the Islands and heard our views."

British forces reclaimed control of the South Atlantic islands in 1982 following an Argentine invasion. The short and bloody war cost the lives of 649 Argentine and 255 British troops.

British Prime Minister David Cameron welcomed the announcement of the referendum, saying it should be "up to the Falkland Islanders themselves to choose whether they want to be British".

"Thirty years ago they made clear that they wanted to stay British. That's why British forces bravely liberated the island from Argentine invaders," he said.

"Now the Argentine government wants to put that choice in doubt again, by shouting down the islanders' ability to speak for themselves and punishing them for exercising their own free choice."

He added: "Britain will respect and defend their choice."